Warburg Pincus co-president targets emerging markets consumer, tech – AVCJ Forum

Speaking at the AVCJ China Forum in Beijing today, Charles Kaye, co-president of Warburg Pincus, highlighted three themes that will define the long-term development of private equity.

Emerging markets are clearly a prominent theme, particularly the role of consumer activity in propelling these economies. However, Kaye noted that technology will ultimately drive changes in business operations and consumer behavior, regardless of geography.

As such, Warburg Pincus is targeting investments in technologically innovative businesses that directly or indirectly leverage consumer growth, such as financial services, retail, information technology and logistics. "We also hope to take advantage of new developments in cloud-based technology, from storage and analytics to big data," Kaye said.

The third trend relates to global resources. There is growing demand for energy, food, water, minerals and other commodities, which is putting pressure on the environment and, in some cases, prompting regulatory intervention. There are opportunities for private equity in addressing these challenges.

Warburg Pincus reached a final close of $11.2 billion on its 11th global fund earlier this month. Following the strategy of its predecessors, the vehicle will focuses on businesses at all stages of development from start-ups to buyouts, targeting the energy, financial services, healthcare, technology, media and telecom, and consumer, industrial and services sectors.

China investments made in the last year include car hire operator China Auto Rental and children's good retailer Kidswant. Although positive on China in general, Kaye noted that the country's equity markets have significantly underperformed in recent years and do not reflect the long-term macroeconomic potential.

The AVCJ China Forum continues tomorrow.

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